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Already a huge hit, Line aims for SNS market [Japan Times, Tokyo]

(Japan Times Via Acquire Media NewsEdge) Feb. 22--The instant messaging app Line is already dominating the lives of young smartphone users in Japan and has spread rapidly elsewhere in the world, but its developer is eyeing even more aggressive growth.

Unlike global giants like Facebook and Twitter, the nascent social networking service developed in Japan was created for smaller and closed networks. By downloading the free app to their smartphone, people not only can chat for free like with WhatsApp Messenger but also talk for free like on Skype.

What's more, and what obsesses young users, is the avalanche of stickers, called "stamps" in the Japanese version, which are like "emoji" on steroids.

They feature original characters, including a bear and a rabbit, and countless others in various expressions of emotion, such as smiling or crying, or in awe or despair, that lets users convey messages with or without text.

The growth in users has been explosive, topping 100 million in January, only 19 months after its launch. Line reached this milestone in less than half the time it took Twitter (49 months) or Facebook (54 months).

"These SNS (social networking services) spread so widely that people get worn out. It is hard to talk deeply and information leaks. We wanted a more closed, private and friendly communication tool," Akira Morikawa, CEO of NHN Japan Corp., told The Japan Times in a recent interview.

NHN Japan, a unit of South Korean Internet giant NHN Corp., developed the communications service.

"Now a timeline is like a social place full of boasts. The more public it becomes, it makes you more cautious to say something,"
Morikawa said, adding he wants "as quickly as possible" to make NHN Japan the top Asian SNS provider with the business scale of a Facebook or Twitter. To achieve this, however, it will be necessary to win a chunk of the huge English-speaking market.

"Above all, it is strategically important to gain a certain share in the United States," he said.

It was almost by accident that Line caught fire outside of Japan, Morikawa said.

When NHN Japan launched the service in 2011, it was aimed solely at Japan. But the English version, launched at the same time, happened to grab the attention of people in the Middle East. Then it spread to Taiwan and Thailand, as well as Hong Kong. Russia was the next land to be conquered.

Currently, Line users can be found in 230 countries, including South Korea and Spain, and is provided in 10 languages.

The 46-year-old CEO, who has worked at Sony Corp. and NTV Corp., said Line's widespread popularity owes to the fast growth of smartphones. "Since we specialize in (services for) smartphones, the spread of smartphones is a big reason," he said, noting the Internet makes Line borderless and easy to use anywhere in the world.

The ambitious CEO is not content with the status quo. And that means he may face a tougher time ahead.

Asked about the company's strategy to gain share in more countries, Morikawa said: "There is no difference in communications in each country.

"The most important factor in communications is it doesn't cost anything. And it is also important that you can do it easily on a smartphone," he said.

On Line's home turf, competition in the SNS market is already fierce, with rivals like Kakao Talk, invested in by Yahoo Japan Corp., and DeNA Japan Co.'s Comm.

At the same time, NHN Japan, where a quarter of the employees are non-Japanese, plans to add more value to the Line service to hold onto its current users in Taiwan, Thailand and other economies.

"It is also important how much value we can add (to the Line app) so the users don't get bored," Morikawa said.

The range of services won't be limited to phone calls and text messages. NHN Japan announced in July that the company will transform Line into "a platform" by reinforcing value-added services such as coupons, fortune-telling and gaming.

But at the same time, the company has no intention of using the "comp-gacha" sales system that has gotten Gree and DeNA into hot water.

Morikawa said the company is currently focusing on an "online to offline" service called LINE@, which started in December and is aimed at revitalizing local areas by linking the Line service with brick-and-mortar stores.

"In this way, a store and an individual customer have a relationship, like friends on Line," he said.

It's all about attracting more users. And for now, boosting that number takes priority over logging a profit, the CEO said.

"The most important thing for now is to expand our market, including in the U.S.," Morikawa said. "Once you sit back and relax, your rival firms get your share in this borderless smartphone world."
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